Exclusive: Gold worth billions smuggled out of Africa

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Exclusive: Gold worth billions smuggled out of Africa
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Billions of dollars' worth of gold is being smuggled out of Africa every ye...

NAIROBI - Billions of dollars’ worth of gold is being smuggled out of Africa every year through the United Arab Emirates in the Middle East – a gateway to markets in Europe, the United States and beyond – a Reuters analysis has found.

Reuters assessed the volume of the illicit trade by comparing total imports into the UAE with the exports declared by African states. Industrial mining firms in Africa told Reuters they did not send their gold to the UAE – indicating that its gold imports from Africa come from other, informal sources.

For example, Democratic Republic of Congo is a major gold producer but one whose official exports amount to a fraction of its estimated production: Most is smuggled into neighboring Uganda and Rwanda. “It is of course worrisome for us but we have very little leverage to stop it,” said Thierry Boliki, director of the CEEC, the Congolese government body that is meant to register, value and tax high-value minerals like gold.

The Dubai Customs Authority referred Reuters’ queries to the UAE foreign ministry, which did not respond. The UAE government media office referred Reuters to the UAE federal customs authority, which also did not respond. Small-scale miners have long used mercury – easy to buy at around $10 for a thumb-sized vial – to extract flecks of gold from ore, before sluicing it away. Mercury’s toxic effects include damage to kidneys, heart, liver, spleen and lungs, and neurological disorders, such as tremors and muscle weakness. Cyanide and nitric acid are also being used in the process, according to researchers and miners in Ghana.

Strong prices have fueled the boom. Today, gold trades at over $40,000 per kilo, which is below a peak from 2012 but still four times the level of two decades ago. While the big South African miners have local refining capacity, the main reason others gave is that no UAE refineries are accredited by the London Bullion Market Association , the standard-setter for the industry in Western markets.

Often, miners must surrender a cut of their output, as commission, to the people who control a pit, let out the equipment, or buy and sell the gold. NGOs such as Global Witness and Human Rights Watch have documented child labor, corruption and links to conflict at some of these mines. At one mine in Zimbabwe visited by Reuters, people said they had to hand over some of their find before they would even be allowed out of the pit.

At the end of last month, Ghana temporarily banned the import of excavator equipment to try to stem a surge in illegal mining using heavy machinery.

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